Don’t need more bail-outs: AIGMay 14th, 2009 - 12:01 am ICT by IANS
Washington, May 13 (DPA) American International Group (AIG), the troubled global insurance giant that helped send the financial industry into a tailspin last September, is slowly stabilising and should not need any more government bail-outs, its chief executive said Wednesday.
CEO Edward Liddy said “substantial progress” had been made in restructuring the company, but left open the possibility of more emergency loan requests if the US economy takes another turn for the worse. The company has already received more than $180 billion in a series of government interventions.
“We are stabilising AIG’s liquidity so that we do not need support beyond those amounts that the government has already authorised, although as I have said before the state of the economy will be a factor,” Liddy said in testimony before the House Oversight and Government Reform Committee.
Libby, who was made CEO only after AIG’s near-collapse in September, said the company had also “reduced, but not yet eliminated, the systemic risk that AIG presents to the global financial system”.
AIG has posted hundreds of billions of dollars in losses due to its exposure to the US mortgage market. The company insured mortgage-backed securities held by US and global banks, which plummeted in value as a US housing boom turned to bust in 2007.
The bail-out of AIG has become a major headache for President Barack Obama, after it emerged in March that the company paid out about $165 million in bonuses to its executives after receiving government funds.
The Washington Post Wednesday reported that senior officials at the Federal Reserve’s regional bank of New York as well as members of Congress knew of the planned bonuses more than five months before the controversy erupted, but did not alert the Obama administration until late February.
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Tags: american international group, barack obama, edward liddy, emergency loan, global banks, global financial system, global insurance, government funds, government interventions, government reform committee, house oversight and government reform committee, insurance giant, loan requests, members of congress, mortgage backed securities, mortgage market, regional bank, systemic risk, tailspin, washington post